Articles Tagged with cryptocurrency scam

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from fraudulent investments scams for over fifteen years.  Recently, common scams involve precious metals and the latest craze, cryptocurrency. When the price of any commodity goes up dramatically – from gold to digital cryptocurrencies – you can bank on the fact that scammers are pitching hard to lure investors into a trap. Many investments pitched on the internet fall into this murky pool.

The top threats to investors, not surprisingly, are Internet- and social-media based promotions, according to the North American Securities Administrators Association (NASAA), a securities regulator trade association. These frauds are often pitched to owners of self-directed Individual Retirement Accounts (IRAs), many of which are tied to brokerage services.

“Self-directed individual retirement accounts, which lack the services and protection of traditional IRAs, can be fertile soil for scammers, especially those involving cryptocurrency-related and precious metals-based investments,” Investment News reported.

AdobeStock_50775754-2-300x200The Securities and Exchange Commission (SEC) obtained a court order halting an allegedly fraudulent initial coin offering (ICO) that targeted retail investors to fund what claimed to be the world’s first “decentralized bank.” The complaint was filed in federal district court in Dallas, Texas on January 25th and was unsealed yesterday. AriseBank and its co-founders Jared Rice Sr. and Stanley Ford allegedly offered and sold unregistered investments in their AriseCoin cryptocurrency by depicting the bank as a decentralized bank offering a variety of products and services using more than 700 virtual currencies. The bank, based out of Dallas, also claimed it developed an algorithmic trading application that automatically trades in various cryptocurrencies. The complaint alleged that AriseBank falsely stated that it purchased an FDIC-insured bank which enabled it to offer customers FDIC-insured accounts and that it offered them VISA cards to spend on the 700 cryptocurrencies. AriseBank also allegedly failed to disclose the criminal background of its executives. The court has since approved an emergency asset freeze over AriseBank, Rice and Ford, and appointed a receiver over AriseBank, including its digital assets.

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